The Saudi stock market is in free fall

A Saudi trader monitors stocks at the Saudi Investment Bank in Riyadh, August 9, 2011.
REUTERS/Fahad Shadeed
Kuwait City (AFP) - Share prices in the energy-rich Gulf states nosedived Sunday following the sharp decline in oil prices and the expected rise in Iranian crude exports after the lifting of sanctions.

The plunge in the first day of trading in the Muslim week also follows heavy losses in global bourses on Friday, when Gulf exchanges were closed for the weekend.

The price of oil, which contributes more than 80 percent to Gulf states' revenues, shed more than 20 percent this year to drop below $30 a barrel. This follows a plunge of 65 percent in the past two years.

The return of Iran to the oil market will only worsen the production glut that has been the main reason for the oil price dive.

The Saudi Tadawul All-Shares Index (TASI), the largest Arab market, dived 6.5 percent to below 5,500-points just minutes after the start of trading. The level was last seen in early 2011. The index closed down 5.4 percent.

The leading petrochemicals sector dipped 8.0 percent, while banks lost 5.3 percent.

Advertisement

Since the start of 2016, the TASI has dropped 21.1 percent, more than all of its losses last year.

The Qatar and Dubai bourses also dropped 6.0 percent at the opening before easing slightly.